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Wow what a crazy trading day that was here today guys we got a massive compact in the stock market it was looking ugly it was looking silly and then all of a sudden at the loews things started bounce back okay so we got to talk about this in the depth why this happened and some very interesting things i saw out there today okay so the dow jones it opened up
Down several hundred points we’ll get into why that happened do right off the bat here and and it just kept getting worse and worse for the first hour – in the market until next thing you know we’re at around the 24,200 level and then olson we kind of bottom there and things just started to bounce back bounce back bounce back and although we still finished a day
Negative it was a point three percent negative day when it was going to be a very very ugly day like we’re talking about a seven hundred point swing there okay now why did the markets go down big here today well basically it happened on the overnight okay oh i’m the overnight basically news came out that hawala ways cfo had been arrested all right you might think
Well what’s a big deal about that why is this matter so much well with everything that’s happened with the trade war between the us and china things had looked like okay you know we might get a deal done there sometime within the next few months that’s what happened over the weekend you know that the tariffs got announced that they’re not going to 25% they’re gonna
Stay at 10% for the next intel like basically march 31st unless a deal can’t get done in there or there’s no progress so it was looking like okay things are on the up-and-up we might get something here okay then also you have china come out and say the you know we’re confused about trump’s comments why is he acting like this is a victory lap or something and you
Had that drama and that’s what sent the market down so big you know yesterday and then all of a sudden today you have a situation where who always cfo is arrested which hawawa is a huge chinese company and all sudden people get real scared and it’s like you know a four year old basically a four year old you tell them you’re gonna you give them a you do you even
Mention that you might get them some ice cream or something then you’re already like like you have to give them that ice cream okay the stock market can act like that sometimes basically where the stock market if they even get a hint of something happening get really excited and then if you take that away from them they’re you know it just gets really ugly and
So now the the situation with the huawei cfo being arrested a lot of people are scared that this will hurt trade negotiations even more now at this point so that’s why the markets went down huge but things started to bounce back and bounce back throughout the day part of the reason i think as leon cooper main came out and basically he came out right around when
The market was at its lowest today they didn’t interview with him and cooperman says the market will end the year higher from this dip because there’s no signs of a recession there’s no sign of a trend change leon cooperman the billionaire investor and founder of omega advisors tells cnbc i could be dead wrong but my position is based on no recession inflation
Not a problem the fed is far from hostile bonds are not competitive with stocks earnings are growing employment as growing cooperman says these were very very very positive comments and basically there’s this news broke like almost right around the time when the stock market was really at its lows and was just getting really really ugly and sometimes you can have
Something like this happens where a you know a billionaire that’s really famous like this in the stock market world right you can come out with some either really positive comments or really negative comments and it can literally helped you know to make the market go up or down i’ve seen them many times with bull situations where you know a big hedge fund manager or
Whatnot will come out with a really negative statement or ray dalio or somebody like that right will come out with a really negative statement it will just send the market down in my opinion part of the reasons why the market recover was leon cupra minka’s literally right when this news broke that of his comments also and things started to bounce back bounce back
Now that’s not the most interesting thing i saw that leon cooperman said today the most interesting thing i saw is he says leon cooperman says the sec needs to investigate computer trading for causing the wild west with markets omega advisor and billionaire investor leon cooperman says he’d like the sec to explain why it hasn’t reacted to the rise in algorithmic
Trading he says quote did somebody from the sec to explain why they eliminated the uptick rule and what do they think about these quantitative trading systems cooperman said they created a tremendous amount of volatility in the market scared the public and effectively the cost of capital to business this is something that you know i remember oh in the early days
Of me investing like the first few years i remember this was something that was talked about a lot the algorithmic trading the computers are taking over and whatnot and in years when the market does pretty well and there’s not much volatility then the talk kind of goes away but in years when all of a sudden there’s a lot of volatility and there’s a you know the
Markets get really volatile you know the kind of gets on the forefront again and we got to think about in this respect the financial markets the public markets what are they for the greater good up they’re supposed to be for the greater good of everybody okay people can invest in the stock market they can build wealth through that the average person okay doesn’t
Mean they pick individual stocks they just invest in index funds and things like that they grow their wealth companies can raise capital that way and the markets are supposed to be a place where they where everybody benefits okay everybody benefits but when you have a really volatile markets then not everybody benefits okay a couple very very small groups of
People really benefit from volatile markets and that is really it and everybody else does not benefit okay now in a volatile market the two groups that are helped one is like short-term traders fat slash speculators and we can even throw like investment banks into that that basically make trading commissions off of their clients trading a lot of activity okay
That’s a first you know the people that are just trying to you know get get little change here and little change there and make money on these volatile markets and playing things like the vix right that’s definitely a way you can make money but that’s a very very very small percentage of the population actually does something like that the second group of people
That benefit from a market situation like this is people like myself who get to buy certain stocks for much much cheaper because of the insane volatility than they would have ever you know matching getting some stocks for okay this is another very very small group of people that are long-term investors that don’t really care and what a stock price is next week or
Next month or next year we’re in it for a three five seven ten years down the road okay and people like myself get to buy stocks that are at extremely cheap valuations much cheaper than you would ever get to buy them and in any other situation okay strictly because the markets just trading down and stocks are being sold in the computer taken over and all this type
Of stuff okay this is another extremely extremely small percentage of the population so between the short-term traders who are trying to make money off this volatility the speculators even and then you have the investment banks and people like myself who are long-term investors who get to buy stocks specific stocks for much cheaper valuations and they should have
You know ever imagine to get them for these are very very very small percentages of a population okay we’re talking about like less than 1% of the population when 99 plus percent of the population isn’t really benefiting from this this whole situation okay so who does this hurt all right this hurts the masses okay first businesses of thinking of going public this
Hurts them so whenever the markets get insanely volatile you see these huge swings in the dow 500 points 700 points 900 points a thousand points it makes all the papers and it scares a lot of big companies that were thinking of going public in raising capital they say dang we don’t want to go we don’t want to go public in in this sort of market right now every time
There’s a lot of volatility in the market the amount of companies that want to actually go public start sliding back and sliding back because they say well we don’t want our stock to go down and get you killed right off the bat maybe that hurts employee morale and then when they don’t get to raise that capital it takes them more time to go ahead and reinvest back
Into the business maybe hire more employees maybe build factories and things like that okay so it slows down the process it’s not a good thing also all this volatility in the stock market hurts the overall business confidence out there okay by businesses when they see on the front pages watch and say the front page of newspaper because no one read the newspaper
Nowadays but when they go on now on the news on google news or whatever they go on to financial websites and they see this news oh my gosh the dow drops 800 points today wow the dowel you don’t have a thousand points swing today 1,300 point swing oh my gosh the markets gone down so much you know look at all these stocks down or something it hurts overall business
Confidence and business you know ceos and whatnot start saying dang maybe the markets start to get weak maybe the actual economy is going to start to get weak because they see the stock market going down they see all this volatility and they start getting really really scared so it hurts overall business confidence in a lot of ins that executive start saying maybe
We should pull back the reins maybe we shouldn’t invest hevy maybe we should be a little you know more careful with our capital right now because maybe things are gonna get ugly and then that just puts in a situation where business confidence is hurt more and more and it’s like a fulfilling prophecy on itself it also ends up hurting real estate prices whenever
The market gets really really volatile it hurts the housing prices especially on the high-end ones the high-end housing prices start getting hurt that starts getting you know hurting you know down the road but the high ends what usually gets hurt first because they see the volatility in the market though the high end of the housing market the real estate market is
Usually the ones that are most in tune with what’s going on with the stock market when that’s that when that high end starts getting hurt it’s like a trickle-down effect in in you know the the little less high end homes start getting hurt as far as the real estate prices then you kind of get down the middle class and it goes from there okay so whenever the markets are
Volatile whenever the markets are weak it hurts real estate prices also hurts consumer spending whenever people you know see all these negative headlines out there about you know weakness and the markets and the stock market’s freaking out a lot of people that weren’t very educated think the stock market is right all the time when the stock market is usually just
Drunk okay the stock market consistently either over prices stocks or under prices stocks consistently throughout history okay in either in either gets way too bullish on stocks overall and maybe specific stocks or it gets way too bearish on stocks overall or specific stocks okay it’s consistently throughout history the stock market can always miss prices stocks
Okay but with with the masses thing is they think the stock market is the tel to where the economy is or where it’s going when a lot of times the stock market just is betting too far on one side or another either things things are way better than they expect or way worse than they expect it happens all the time the stock marry the beautiful thing for our individual
Stock pickers as we can come in and scoop up shares when the stock market miss prices that we can either short shares if they get too elevated or buy put options or we can go ahead and invest in companies at the you know the stock market has just gotten way too negative on okay but the masses the masses actually think the stock market is like a gauge on the overall
Economy and when the stock market is weak when there’s a lot of volatility when they start to read these headlines maybe they start saying maybe i shouldn’t spend as much maybe i need to start actually saving my money and things like that which isn’t necessarily too bad of a thing but at the same time it does hurt consumer spending when consumer spending gets hurt
That’s what it reiterates a business’s brain that oh my gosh maybe things are getting weak maybe those headlines are right it’s a fulfilling prophecy okay it hurts retirees retirees rely on you know their stock market funds so much okay the retirees do so whenever you got this volatility in the market and you got the markets going down and retirees are freaking out
Because they’re like oh my gosh my mom i’m retired now i have no way of making money my wealth is going down since most my money’s in the stock market it hurts other retirees and we know the baby boomer generation right now is retiring in mass right and lastly it hurts new investors so one side of me loves when new investors come into a volatile market like when i
Came to the market in 2008-2009 it was like ridiculously volatile okay it makes today’s volatility look like a joke really okay but the great thing i loved about that is you really either make sure it breaks you very early on but unfortunately most new investors when they if they come into a super volatile market they’re gonna be scared away just because there’s
So much volatility and if they’re investing in stocks and most people that have bought stocks in 2018 or down on their positions so most new investors that have come into the market in 2018 think oh my gosh this is just a place where i lose money okay iii you know it’s all it’s almost the opposite of an investor base that came in 2017 people that came in the market
In 2017 almost guaranteed to make money okay most stocks had an amazing year in 2017 so if you came in the market started buying stocks in 2017 good chance by the end of 2017 you hadn’t made money you were very positive on your accounts 2018 complete polar opposite if you’ve bought stocks in 2018 there’s almost you’re almost guaranteed to be down on your positions
So unfortunately most people get scared how the stock market who are new investors because they think oh my gosh the stock market’s a scam i just lose money in a stock market oh my gosh and then they you know judge off short term because they have no long term basis to go off though because they’re just getting in right however on the flip side you know only the
Strong survive and you know the ones that are really built for this okay it can come into a volatile market and realize this is just in the game and you got to get used to it early on because trust me the markets will always be volatile it comes up every couple years every two three years also in the market very volatile it just happens is consistent it will go on
Forever but but honestly if we’re looking at it from the perspective of should the sec look into more algorithmic trading in this type of stuff in my opinion absolutely they should just for the mere fact that if you’re causing unnecessary volatility in the market it doesn’t do good for the good for the for the masses that’s the bottom line all it does is actually
Hurt things for the masses the more volatile the stock market is the more it hurts the masses out there the more it helps a very very small percentage of the population so and my opinion should be looked into but neither so say we’ll probably still be in a volatile market for quite a while until we get a trade deal done if we get a trade deal done the market should
Continue to be volatile you’ll probably see big swings one day really positive because maybe some good comments come out one day may really negative because something happens like the whole huawei cfo’s arrested like that’s just a name in the game right now we just have to get used to it so anyways hope you guys enjoyed this let me know your opinion down there in
That comment section as always thank you for watching and have a great day
Transcribed from video
Dow 700 Point Comeback In Mere Hours! Stock Market Craziness By Financial Education
